The waivers included exemptions for the three largest buyers of Iranian oil -- China, India and South Korea -- "eased the potential impact that the Iranian sanctions will likely have" and continued to influence prices a day after the announcement, Justin McQueen, an analyst at DailyFX, told UPI.
"However, oil prices did claw back some losses with Brent breaking back above $73 per barrel as the IEA Director, Fatih Birol, signaled that potential supply shocks in other parts of the world could occur with Venezuelan output seen dipping below one million barrels per day soon," he added.
As of 9.35 a.m. EST, WTI front-month futures traded at $63.30 per barrel, or 0.3 percent higher, while Brent front-month futures traded at $73.10 per barrel, or 0.1 percent lower.
The Iran sanctions are aimed at preventing the country from obtaining revenue, which is derived mostly from oil exports, and result from a decision announced on May 8, when the U.S. withdrew from a nuclear accord with Iran.
Not only was Iran facing sanctions, but also anyone engaging with that nation to buy the crude. There was not, however, any formal announcement of waivers between May and November.
Only on Monday, when the sanctions went into effect as previously announced, did the U.S. grant China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey temporary exemptions. The Iran sanctions had been "priced-in," but the waivers were not, said McQueen.
The U.S. Energy Information Administration projected late last month that Iranian crude oil production was likely to decline after the sanctions by about one million barrels from the 2.8 million barrels per day production it saw in April.
The crude oil market saw a selloff in October, in part because of reports that increases in production by some of the biggest world producers, including Russia, Saudi Arabia and the United States, were going to compensate for potential declines.
WTI prices have reached levels not seen since early April, and are down from a high of $74.96 per barrel on October 9. Brent front-month futures were at $85 per barrel on the same day.
Venezuela's crude oil production was 1.2 million barrels per day in September, down 42,000 barrels from August, according to an OPEC report.
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